Drug Advertising Booms - Kantar
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`Drug Advertising Booms to $6.4
`Billion
`
`JON SWALLEN
`Chief Research Officer, Kantar Media
`Intelligence North America
`
`HEALTH 05.08.2017 / 16:00
`
`Pharma is the 7th largest ad category in the U.S. at $6.4 billion last year.
`It's no secret that the American Medical Association isn't a huge fan of direct-to-consumer pharmaceutical
`advertising. But that hasn’t stopped pharma marketers from continuing to invest in promoting their brands.
`Indeed, pharma is currently the 7th largest ad category in the U.S. as ranked by total spending which
`reached $6.4 billion last year – a growth of 64% since 2012.
`
`Pharma budgets are growing
`
`This surge in category expenditures reflects larger budgets from a multitude of drug manufacturers. The
`number of brands spending at least $50 million annually, as well as the number of brands spending over
`
`http://us.kantar.com/business/health/2017/drug-advertising-booms[10/31/2017 7:36:07 AM]
`
`Page 1 of 5
`
`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1609
`
`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`
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`KANTAR.COM
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`Drug Advertising Booms to $6.4
`Billion
`
`JON SWALLEN
`Chief Research Officer, Kantar Media
`Intelligence North America
`
`HEALTH 05.08.2017 / 16:00
`
`Pharma is the 7th largest ad category in the U.S. at $6.4 billion last year.
`It's no secret that the American Medical Association isn't a huge fan of direct-to-consumer pharmaceutical
`advertising. But that hasn’t stopped pharma marketers from continuing to invest in promoting their brands.
`Indeed, pharma is currently the 7th largest ad category in the U.S. as ranked by total spending which
`reached $6.4 billion last year – a growth of 64% since 2012.
`
`Pharma budgets are growing
`
`This surge in category expenditures reflects larger budgets from a multitude of drug manufacturers. The
`number of brands spending at least $50 million annually, as well as the number of brands spending over
`
`http://us.kantar.com/business/health/2017/drug-advertising-booms[10/31/2017 7:36:07 AM]
`
`Page 1 of 5
`
`ACRUX DDS PTY LTD. et al.
`
`EXHIBIT 1609
`
`IPR Petition for
`
`U.S. Patent No. 7,214,506
`
`
`
`Drug Advertising Booms - Kantar
`
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`
`HOME
`
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`
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`FOLLOW US
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`ABOUT
`
`RETAIL HEALTH BRANDS
`
`KANTAR.COM
`
`Drug Advertising Booms to $6.4
`Billion
`
`JON SWALLEN
`Chief Research Officer, Kantar Media
`Intelligence North America
`
`HEALTH 05.08.2017 / 16:00
`
`Pharma is the 7th largest ad category in the U.S. at $6.4 billion last year.
`It's no secret that the American Medical Association isn't a huge fan of direct-to-consumer pharmaceutical
`advertising. But that hasn’t stopped pharma marketers from continuing to invest in promoting their brands.
`Indeed, pharma is currently the 7th largest ad category in the U.S. as ranked by total spending which
`reached $6.4 billion last year – a growth of 64% since 2012.
`
`Pharma budgets are growing
`
`This surge in category expenditures reflects larger budgets from a multitude of drug manufacturers. The
`number of brands spending at least $50 million annually, as well as the number of brands spending over
`
`http://us.kantar.com/business/health/2017/drug-advertising-booms[10/31/2017 7:36:07 AM]
`
`Page 1 of 5
`
`
`
`Drug Advertising Booms - Kantar
`
`$100 million, have both more than doubled since 2012. Looking at the top 10 prescription drug brands ranked
`by 2016 ad investments, eight had double-digit growth rates year-over-year and all of them spent over $100
`million.
`DTC Ad Expenditures: Top 10 Brands
`
` f
`in
`
`Brand
`
`Humira
`
`Lyrica
`
`Eliquis
`
`Xeljanz
`
`Opdivo
`
`Viagra
`
`Chantix
`
`Cialis
`
`Trulicity
`
`Prevnar
`
`2016 (millions)
`
`% Change vs 2015
`
`$439
`
`$392
`
`$296
`
`$258
`
`$168
`
`$156
`
`$151
`
`$150
`
`$142
`
`$128
`
`20%
`
`19%
`
`17%
`
`37%
`
`32%
`
`15%
`
`13%
`
`-34%
`
`103%
`
`-7%
`
`Note: Includes branded and unbranded advertising
`
`New RX Approvals Fuel Spend
`
`Another catalyst for category growth has been well-funded marketing launches for new Rx approvals. During
`the past several years stepped-up R&D by major pharma companies has filled the product pipeline with new
`drug treatments, many of which have promising sales potential and have been commensurately supported by
`DTC advertising.
`
`Using our comprehensive ad monitoring database we pinpointed the start date of advertising for every new
`Rx introduction since 2013 and tabulated expenditures over their first 12 months. The first-year investments
`made by newcomers have accounted for as much as 13% of total category spending.
`First-year investments by year of launch
`
` f
`in
`
`.
`
`# of Rx Brand Launches
`
`Total Ad Spend in Year 1 from launch (MM)
`
`Year 1 Ad Spend as % of All DTC Ad Spend
`
`2013
`
`2014
`
`2015
`
`2016
`
`24
`
`$309
`
`7%
`
`33
`
`$683
`
`13%
`
`33
`
`17
`
`$494
`
`$265*
`
`8%
`
`4%*
`
`http://us.kantar.com/business/health/2017/drug-advertising-booms[10/31/2017 7:36:07 AM]
`
`Page 2 of 5
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`Drug Advertising Booms - Kantar
`
`* Spending amounts for 2016 launches are incomplete. Most of these brands have not yet been advertised for a full 12 months
`
`Source: Kantar Media
`
`Looking back at the freshmen classes of 2013 thru 2015, the chart below details brands which spent $50
`million or more on advertising in their first year from launch. New introductions during 2016 are still accruing
`their first-year spend but four brands are pacing to exceed the $50 million threshold – Bridion, Kybella, Taltz
`and Xiidra.
`$50+ Million Freshman - Year 1 Ad Spend (millions)
`2013
`
` f
`in
`
`Eliquis
`
`Myrbetriq
`
`2014
`
`Jublia
`
`Breo Ellipta
`
`Anoro Ellipta
`
`Opdivo
`
`Harvoni
`
`Forxiga
`
`2015
`
`Belsomra
`
`Cosentyx
`
`Entresto
`
`Viberzi
`
`Rexulti
`
`$131
`
`$78
`
`$134
`
`$102
`
`$94
`
`$93
`
`$93
`
`$70
`
`$111
`
`$83
`
`$64
`
`$61
`
`$53
`
`Source: Kantar Media
`
`Despite their big ad budgets, some of these drugs are targeted at very narrow consumer groups. For
`example, when Opdivo was launched in 2014 its FDA approval was for a lung cancer condition with a patient
`population of fewer than 200,000 people. Yet the sales revenue potential for the drug (aided by a six-figure
`price per patient) justified an estimated $93 million of ad spending during its first year. This was based in part
`on the expectation of imminent approvals for additional indications that would enlarge the patient pool.
`
`Can Ad Spend Growth Be Maintained?
`
`As the past few years have demonstrated, a diverse and well-stocked pipeline of new prescription drug
`treatments coming onto the market has a cascading impact on DTC advertising expenditures. Incremental
`spending is generated from new product launches which in turn can prompt competitors to raise their
`investments in defense of market share. More competition also provides an impetus for brands to sustain
`these higher spending levels over time.
`
`http://us.kantar.com/business/health/2017/drug-advertising-booms[10/31/2017 7:36:07 AM]
`
`Page 3 of 5
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`
`Drug Advertising Booms - Kantar
`
`There are a number of business issues that could affect future marketing budgets. For example:
`
`The pace of marketing launches is difficult to forecast because it takes several years for a pharma
`company to complete the cycle of research, development, clinical trials and FDA approval.
`The rising cost of prescription drugs is a public policy issue and might lead to actions that impact the
`revenue stream which funds consumer marketing budgets.
`Changes to the drug insurance marketplace could affect consumer demand and use of prescription
`medications.
`
`Taking all of these factors into account, it remains to be seen whether or not the growth of DTC advertising
`that we’ve experienced from 2012-2016 can be sustained.
`
`Source: Kantar Media
`
`PHARMACEUTICALS ADVERTISING PRESCRIPTION DRUGS
`
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`Drug Advertising Booms - Kantar
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